The Securities and Exchange Commission (SEC) rejected the proposal for the sale of the Chicago Stock Exchange for $20 million to a group led by the Chongqing Casin Enterprise Group, a Chinese-owned company.
The Chicago Stock Exchange, or CHX, is a privately-held trading hub based in Chicago, Illinois, which handles only a small fraction of the daily stock trades.
The SEC stated that it blocked the deal as the details regarding the ownership of the exchange were insufficient and also there were issues regarding the oversight of the Exchange by the SEC once it was sold. In other words, it was unclear who exactly would control the exchange and be in charge of the major decision-making process.
The SEC was also unsure whether it would be given access to the exchange’s documents after the sale.
While supporters of the deal claimed that it would give the U.S. financial marketplace a necessary boost by opening the door to more Chinese investors, most lawmakers — including President Trump — strongly criticized the proposal. They claimed it would endanger the security and stability of the financial markets in the United States.
The SEC claimed that the deal structure had enough problems within itself that it had not been necessary to bring in the broader concerns over national security.